StarTrack Express Pty Ltd v TMA Australia Pty Ltd

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FEDERAL COURT OF AUSTRALIA

StarTrack Express Pty Ltd v TMA Australia Pty Ltd [2023] FCAFC 200

Appeal from: StarTrack Express Pty Ltd v TMA Australia Pty Ltd [2023] FCA 1271
File number(s): VID 925 of 2023
Judgment of: O’CALLAGHAN, STEWART AND BUTTON JJ
Date of judgment: 30 November 2023
Date of publication of reasons: 15 December 2023
Catchwords: INJUNCTIONS – application for interlocutory injunction – where application refused by primary judge – whether prime facie case of contraventions of ss 18 and 29 of the Australian Consumer Law and for tort of passing off – whether balance of convenience favoured grant of interlocutory injunction – appeal allowed  
Legislation: Competition and Consumer Act 2010 (Cth) sch 2, ss 18, 29
Cases cited:

Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640

Bullock v Federated Furnishing Trades Society of Australia (No 1) (1985) 5 FCR 464

GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser Healthcare (UK) Ltd [2013] FCAFC 102; (2013) 305 ALR 363

House v The King (1936) 55 CLR 499

Samsung Electronics Company Ltd v Apple Inc (2011) 217 FCR 238

Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729

StarTrack Express Pty Ltd v TMA Australia Pty Ltd [2023] FCA 1271

Verrochi v Direct Chemist Outlet Pty Ltd (2016) 247 FCR 570

Warner-Lambert Co LLC v Apotex Pty Ltd [2014] FCAFC 59: (2014) 311 ALR 632

Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 83
Date of hearing: 30 November 2023
Counsel for the Appellant: HNG Austin KC with AN McRobert and L O’Rorke
Solicitor for the Appellant: Lander and Rogers
Counsel for the Respondent: P Wallis KC with L Davis
Solicitor for the Respondent: K&L Gates

ORDERS

VID 925 of 2023
BETWEEN:

STARTRACK EXPRESS PTY LTD

Appellant

AND:

TMA AUSTRALIA PTY LTD

Respondent

ORDER MADE BY:

O’CALLAGHAN, STEWART AND BUTTON JJ

DATE OF ORDER:

30 NOVEMBER 2023

THE COURT NOTES THAT:

A.The appellant gives the usual undertaking as to damages in the form set out in the Usual Undertaking as to Damages Practice Note (GPN-UNDR).

THE COURT ORDERS THAT:

1.The appellant have leave to appeal and to file an amended notice of appeal in the form of the draft notice provided to the Court this day.

2.The appeal be allowed.

3.Order 1 of the orders made on 23 October 2023 be set aside.

4.In lieu thereof, there be an order in proceeding VID 822 of 2023 that:

Pursuant to ss 19 and 23 of the Federal Court of Australia Act 1976 (Cth), that until the hearing and determination of the proceeding or until further order, the respondent:

a.be restrained from using and/or publishing any domain name that includes “Startrack”; and

b.be restrained from sending any email or “electronic direct mail” to any person, which uses the word “Startrack” and which represents that the respondent or its business is…

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Details
Case
[2023] FCAFC 200
Decision Date

CaseChat Overview and Summary

In the appeal, StarTrack Express Pty Ltd sought to challenge the primary judge's decision to deny its application for an interlocutory injunction against TMA Australia Pty Ltd. StarTrack argued that TMA had violated sections 18 and 29 of the Australian Consumer Law and committed the tort of passing off by continuing to use an online platform that closely resembled StarTrack's own platform after the termination of their contractual relationship. The appeal was heard in the Federal Court of Australia, where the primary judge had previously ruled against StarTrack's request for an interlocutory injunction.

The legal issues central to the appeal revolved around the assessment of the strength of StarTrack's prima facie case regarding the alleged consumer law contraventions and the tort of passing off. The court was tasked with determining whether the primary judge had erred in his evaluation of the evidence and whether the balance of convenience favoured the grant of an interlocutory injunction. StarTrack contended that the primary judge had misconstrued the significance of certain facts and failed to apply the appropriate legal principles, which warranted a re-exercise of the discretion concerning the injunction.

The appellate court found that the primary judge had indeed erred in his assessment of StarTrack's prima facie case. The court identified specific instances where the primary judge had misapprehended the evidence, such as the timing of the appearance of a pop-up message on the repurposed platform and the percentage of customers who opened TMA's promotional email. Additionally, the court noted that the primary judge had overlooked critical evidence concerning the internet architecture that directed users to the repurposed platform when searching for StarTrack packaging. The appellate court concluded that the primary judge's characterisation of StarTrack's prima facie case as weak was incorrect and that the case was, in fact, sufficiently strong. Consequently, the appeal was allowed, and the injunction order was set aside in favour of a new order that restrained TMA from using certain domain names and from sending emails that misrepresented their association with StarTrack.

The final orders of the court granted StarTrack leave to appeal, set aside the previous injunction order, and issued a new order restraining TMA from using specific domain names and misleading communications regarding their association with StarTrack until the matter was resolved. The court reserved questions relating to costs for further consideration.

Orders

Orders of the court

1. The appellant have leave to appeal and to file an amended notice of appeal in the form of the draft notice provided to the Court this day.

2. The appeal be allowed.

3. Order 1 of the orders made on 23 October 2023 be set aside.

4. In lieu thereof, there be an order in proceeding VID 822 of 2023 that:

Pursuant to ss 19 and 23 of the Federal Court of Australia Act 1976 (Cth), that until the hearing and determination of the proceeding or until further order, the respondent:

a. be restrained from using and/or publishing any domain name that includes “Startrack”; and

b. be restrained from sending any email or “electronic direct mail” to any person, which uses the word “Startrack” and which represents that the respondent or its business is associated with the appellant.

5. Any questions in relation to costs be reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

We considered that the primary judge erred in his assessment of the prima facie case alleged by StarTrack. As we set out below, in the course of concluding that StarTrack’s prima facie case was not “strong”, but was “weak” (J at [67]), the primary judge mistook certain of the facts, and also failed to apply the correct principle. These are errors within the well-known principles set out in House v The King (1936) 55 CLR 499 at 504-5 (Dixon, Evatt and McTiernan JJ), to which we return below. Accordingly, it falls to us to re-exercise the discretion. Background StarTrack is a wholly-owned subsidiary of the Australian Postal Corporation (Australia Post) that provides parcel, freight and logistic services. StarTrack sells so-called “consumable products”, including satchels, envelopes, boxes and related packaging supplies. StarTrack’s business strategy encourages customers to treat it as a “one stop shop” for carriage of parcels as well as the purchase of consumables, but StarTrack’s customers who purchased consumables did not necessarily use its freight services, and vice versa. In about August 2012, StarTrack and TMA entered into a contract pursuant to which TMA provided various services in connection with StarTrack’s consumables business. From 2017 until September 2023, StarTrack customers ordered StarTrack consumable products via an online platform accessible at the StarTrack URL. The platform was operated by TMA and used exclusively for the sale of StarTrack products to customers that StarTrack had pre-authorised. StarTrack provided a price list to TMA, to be applied to the specific customer; StarTrack set the prices on a customer-by-customer basis. In May 2023, StarTrack gave TMA notice that it was terminating the contract. TMA continued to operate an online platform at the StarTrack URL, but “repurposed” it to sell TMA’s own consumable products, including to StarTrack customers. The parties (somewhat confusingly) continued to call TMA’s repurposed portal “the ST Portal”.The evidence Before the primary judge, StarTrack read two affidavits of Rebecca Louise Arsenoulis sworn 4 and 12 October 2023 respectively. It also read an affidavit of Antonio Citera affirmed 4 October 2023. TMA read two affidavits of Rhys Andre Kneepkens affirmed 6 and 12 October 2023 respectively. Ms Arsenoulis is a “Business Analyst – Security Guarding” in StarTrack’s “Group Security” team. She was previously, and for around eight years, a manager at StarTrack, involved in its consumables business. Mr Kneepkens is a “Manager (Enterprise Solutions)” at TMA. Between 2012 and 2017, he was TMA’s account manager for its StarTrack account and was responsible for overseeing and managing the StarTrack relationship. In his current role, he has responsibility for all of TMA’s ecommerce platforms and, prior to the termination of the contract, was involved in the StarTrack account.Access to the ST Portal Mr Kneepkens deposed that once the ST Portal became operational in 2017, TMA sent StarTrack’s customers a “welcome email” which included their login details to access the ST Portal. The welcome email was also sent to new customers after the ST Portal became operational in 2017.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

An example of a case where discretion may miscarry is where a judge erred in rejecting important aspects of evidence relied upon. See Shercliff at 734. Consideration Grounds 1-4 StarTrack submitted that the learned primary judge at least mistook the significance of the facts in three critical respects. First, it was submitted that the judge, in concluding that the risk that users might arrive at the ST Portal thinking they had accessed a StarTrack website, or a website associated with StarTrack, was “effectively addressed” by the pop-up (“TMA no longer has any commercial relationship with StarTrack and TMA”) failed to appreciate that the pop-up appeared only after a customer, using the login details previously issued to StarTrack customers, had logged in. It was submitted that the primary judge thus erred by not considering the effect of the impugned conduct prior to any member of the relevant class of consumer seeing the pop-up. Secondly, it was submitted that the primary judge did not appreciate or understand the significance of the evidence that, on TMA’s own evidence, only 22.6% of people opened the TMA Promotional Email. Thirdly, it was submitted that the primary judge did not refer to critical evidence that the Google search results for StarTrack packaging take the user to “hits” involving the ST Portal – that is, through what counsel called “the architecture of the internet”, the inclusion of “startrack” in the StarTrack URL resulted in the user being driven to the ST Portal by searching for the StarTrack name on the Google search engine. It was submitted that his Honour thus erred in finding that there was a “very low” risk that users might arrive at the ST Portal thinking that they had accessed a StarTrack website (or a website otherwise associated in some way with StarTrack); and that he ought to have found that there was significant, not a very low, risk of that type. StarTrack submitted that the primary judge was wrong to regard its prima facie case as weak. Before his Honour, StarTrack submitted that its prima facie case was a strong one. That submission was made in the context of the principles we have set out at paragraph [54] above concerning the interrelationship between the strength of an applicant’s prima facie case and its position on the balance of convenience. It was only in respect of the contractual claims based on the restraint clause – with which we are not concerned – that StarTrack put its submissions on the strength of its prima facie case on the basis that the interlocutory relief it sought was tantamount to final relief, given that the restraint clause would likely have expired before trial. The conclusions we set out below concerning the strength of StarTrack’s prima facie case in respect of its ACL and passing off case are to be understood in this context. While StarTrack maintained that it did not need to show that its prima facie case was a strong one – although it contended that it was – it submitted that the primary judge was wrong to regard the prima facie case as weak. StarTrack contended that the primary judge ought to have found that there was a sufficiently strong prima facie case that ordinary and reasonable members of the class of persons who arrived at the ST Portal would think they have arrived at a StarTrack website or a website otherwise associated in some way with StarTrack, having regard to that evidence.